A switchable dual-wavelength erbium-doped fiber (EDF) laser is proposed and demonstrated. The interference filter is achieved by employing a phase-shifted fiber Bragg grating (PSFBG) combined with Sagnac loop structure. By adjust-ing polarization controller (PC) states, the birefringence effect is introduced to weaken mode competition, then stable and switchable dual-wavelength fiber laser can be realized. Based on coupled-mode theory and transmission matrix, the Sagnac loop transmission characteristics are studied. The experimental results show that the proposed fiber laser can operate in switchable dual-wavelength output mode at room temperature just by simply adjusting PC. The output wavelength range of fiber laser is 1 556.128—1 556.384 nm, the side mode suppression ratio (SMSR) is over 45 dB, and dual-wavelength spacing as small as 0.048 nm is achieved, which can be used in high-fineness dense wavelength division multiplexing (DWDM) systems and similar structures.